On August 21, 2015, the Sixth Circuit issued its widely anticipated decision in Hill v. Homeward Residential, Inc., No. 14-4168 (6th Cir. August 21, 2015), which affirmed a jury verdict that found Homeward Residential, Inc. had plaintiff Hill’s prior express consent to call him using an auto-dialer. The case is significant because plaintiff Hill challenged whether the jury instructions used at trial were too general and permitted the jury to find prior express consent in too many scenarios. Hill argued that the jury instructions should have specified that he could only give consent during the “‘initial transaction’ that creates the debt,” but the court, in approving the jury instructions, found that a person could give consent at any time “‘during the transaction’ that involves the debt (i.e., ‘regarding the debt‘)”. The Sixth Circuit opinion quoted extensively from the FCC’s guidance from 2008, which clarified prior express consent in the debtor-creditor context. Hill argued unsuccessfully that “during the transaction” meant during the initial transaction.
Mr. Hill gave his home phone number to his original loan company when he first signed the documents for his home loan in 2003. However, during the interim period, Homeward Residential took over his loan, and Hill canceled his home phone number and started using his cell phone number as his primary number instead. When he changed his number, he called Homeward Residential specifically to inform them that he had a new primary number. Later, Hill applied for and received a home loan modification. On the modification documents, Hill provided his cell phone number as his primary number once more. The court found that “Hill knew that this number would be used if Homeward needed to reach him about his mortgage.”
Guided by the FCC’s 2008 opinion, the Sixth Circuit held that “[a] debtor consents to calls about ‘an existing debt’ when he gives his number ‘in connection with’ that debt, 23 F.C.C. Rcd. at 564–including after his initial signing of the loan.” In addition, the Court noted that the FCC’s guidance also stated that “any ‘autodialed and prerecorded message calls to wireless numbers provided by the called party in connection with an existing debt are made with the ‘prior express consent’ of the called party.'” So, because Homeward Residential called Hill regarding the debts he had due to his default on his home loan modification, which arose out of his original loan, the Court found that he gave “his number ‘in connection with’ that debt” and Homeward Residential was entitled to call him, even using an auto-dialer, regarding that debt. Id.
The Sixth Circuit joins the Eleventh Circuit in its view of prior express consent, but the Court distinguished a Second Circuit decision that held that the creditor called the plaintiff without his prior express consent. The Sixth Circuit found that the Second Circuit decision was based on the fact that the plaintiff had given his number to a creditor “outside of the context of the debt,” such that the creditor did not have the party’s prior express consent to call regarding the debt. Id. In Hill’s case, he had specifically provided Homeward Residential with his cell phone number on a number of different occasions for his home loan, which the Sixth Circuit found to be sufficient to satisfy the “during the transaction” requirement.
The Sixth Circuit decision further cements creditors’ rights to call debtors using auto-dialers prior to the FCC’s 2012 rule requiring prior express written consent. However, now that prior express written consent is required, these rulings will only apply to cases involving the interpretation of “prior express consent.”